* Gustav shuts U.S. Gulf of Mexico oilfields, refineries
* Gustav expected to hit Gulf coast as Category 3
* Iran says $100 a barrel lowest acceptable price
(Updates throughout, previous PERTH)
By Matthew Robinson
LONDON, Sept 1 (Reuters) - Oil fell on Monday as Hurricane
Gustav showed no signs of picking up more strength as it
barrelled toward the Louisiana coast after forcing the shutdown
of nine refineries and nearly all U.S. Gulf of Mexico oil
production.
Weather models early Monday continued to show Gustav hitting
the Louisiana coast later in the day as a major Category 3
hurricane, forcing companies to shut in 96 percent of Gulf oil
production and 82 percent of natural gas output. []
At least 12.5 percent of total U.S. refining capacity was
shut down and other plants cut rates. The Louisiana Offshore Oil
Port, the only U.S. port capable of offloading the biggest oil
tankers, halted all operations on Sunday.
For a graph on the projected path of Gustav, please click
on: https://customers.reuters.com/d/graphics/STRM_GUSTAVU2.gif
U.S. crude <CLc1> slipped 60 cents to $114.86 a barrel by
1140 GMT, after touching $118.60 a barrel when the New York
Mercantile Exchange (NYMEX) opened for electronic trading
several hours earlier than usual. Trade in the United States
will be shut due to the U.S. Labor Day holiday.
London Brent crude fell 65 cents to $113.40 a barrel.
Despite the shutdowns, analysts said crude slipped from
highs as forecasts showed the storm was not strengthening beyond
earlier projections.
"Gustav is not strengthening," said Mike Wittner of Societe
Generale. "That could be bearish."
Gustav is the biggest threat to the region -- home to a
quarter of U.S. oil output and 15 percent of natural gas output
-- since Hurricanes Katrina and Rita wrecked more than 100
offshore oil platforms in 2005 and closed several large
refineries for months.
"This is definitely a dangerous storm but I think most of
the market is in a wait-and-see mode, waiting to see (if there
are) disruptions to oil facilities and pipeline infrastructure
before they make a big move," said Gerard Burg, a commodities
analyst at the National Bank of Australia in Melbourne.
Nearly 2 million people fled the Louisiana coast and more
than 11 million residents in five U.S. states were braced for
the impact from the fast-moving storm, which was expected to
make landfall around New Orleans. []
The NYMEX declared force majeure on all delivery obligations
under its August and September natural gas futures after ports
and the Henry Hub delivery point were shuttered.
Gains in the dollar also helped pressure crude, traders
said. Investors rushed into commodities earlier in the year as a
hedge against inflation and the weak dollar.
OPEC, RUSSIA
Iran's oil minister said on Sunday $100 a barrel was the
lowest acceptable price for crude. Iran, OPEC's second-largest
producer, has said the oil market is oversupplied as prices have
dropped from the record high over $147 a barrel struck in July.
OPEC meets in Vienna on Sept. 9 to discuss output policy but
other member nations have not come out and publicly backed Iran.
Venezuela and Ecuador said on Friday that they expect the oil
exporters group to maintain current output levels.
Geopolitical tensions between Russia and the West also lent
support to oil prices.
Russia does not want a confrontation with the West but will
hit back if attacked, Kremlin leader Dmitry Medvedev said on
Sunday, a day before EU leaders meet to draft a response to
Moscow's actions in Georgia.
Russia, the world's largest exporter of natural gas and the
second-largest oil exporter, supplies more than a quarter of
Europe's gas needs.
(Additional reporting by Fayen Wong in Perth; editing by James
Jukwey)
